Beer prices lagging global inflation:AB InBev CEO

GLOBAL beer price increases are lagging inflation giving them further room to rise, the head of AB InBev, the world’s biggest brewer said.

The maker of Budweiser and Corona said beer price increases have not kept pace with inflation measures such as the US Consumer Price Index (CPI). In the past, the company has raised prices to match inflation.

“What changed this year is that CPI is much bigger than one would expect and accelerated throughout the year,” AB InBev chief executive officer Michel Doukeris said on a call on Thursday (Jul 28) with analysts and investors.

The US consumer price index rose by 9.1 per cent in June from a year earlier, topping forecasts and hitting a fresh 4-decade high. 

The world’s biggest brewer, which also makes Stella Artois, is balancing consumer demand with its rising input costs, the CEO said. 

“We have many levers to pull as to how we accept input costs,” Doukeris added.

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The company reported second quarter financial results earlier on Thursday that beat most analysis consensus estimates. Still, the company’s shares fell as much as 5.6 per cent in European trading as traders worried about falling volumes in the US and weaker margins. 

AB InBev pushed its prices up by about 8 per cent during the first half and it could have to do more during the rest of the year, said Bloomberg Intelligence analyst Duncan Fox. 

“Pushing prices higher could test volume and mix if consumers decide to buy cheaper beers,” Fox said. BLOOMBERG